Correlation Between Firan Technology and CI Financial

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Can any of the company-specific risk be diversified away by investing in both Firan Technology and CI Financial at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Firan Technology and CI Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Firan Technology Group and CI Financial Corp, you can compare the effects of market volatilities on Firan Technology and CI Financial and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Firan Technology with a short position of CI Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firan Technology and CI Financial.

Diversification Opportunities for Firan Technology and CI Financial

0.24
  Correlation Coefficient

Modest diversification

The 3 months correlation between Firan and CIX is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Firan Technology Group and CI Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Financial Corp and Firan Technology is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Firan Technology Group are associated (or correlated) with CI Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Financial Corp has no effect on the direction of Firan Technology i.e., Firan Technology and CI Financial go up and down completely randomly.

Pair Corralation between Firan Technology and CI Financial

Assuming the 90 days trading horizon Firan Technology Group is expected to generate 10.25 times more return on investment than CI Financial. However, Firan Technology is 10.25 times more volatile than CI Financial Corp. It trades about 0.26 of its potential returns per unit of risk. CI Financial Corp is currently generating about 0.09 per unit of risk. If you would invest  742.00  in Firan Technology Group on November 3, 2024 and sell it today you would earn a total of  83.00  from holding Firan Technology Group or generate 11.19% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Firan Technology Group  vs.  CI Financial Corp

 Performance 
       Timeline  
Firan Technology 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Firan Technology Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain technical and fundamental indicators, Firan Technology displayed solid returns over the last few months and may actually be approaching a breakup point.
CI Financial Corp 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in CI Financial Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, CI Financial displayed solid returns over the last few months and may actually be approaching a breakup point.

Firan Technology and CI Financial Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Firan Technology and CI Financial

The main advantage of trading using opposite Firan Technology and CI Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firan Technology position performs unexpectedly, CI Financial can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in CI Financial will offset losses from the drop in CI Financial's long position.
The idea behind Firan Technology Group and CI Financial Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
Check out your portfolio center.
Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

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